Providing vulnerable populations with social safety nets using conditional donations
Event-driven conditional donations can power social-economic safety nets for smallholders in adverse moments such as crop or livestock loss caused by natural disasters such as drought and floods.
Why conditional donations?
Such donations are designed to be given out to the affected upon the occurrence of specified risks. Climate change driven risks caused by adverse weather are increasing every year. From droughts, to floods, to wildfires, more and more people are being exposed to disasters that wipe out all of their economic resources. From the failure of crops to the death of livestock, these risks disproportionately affect people from the global south who depend on such resources for their livelihoods. Conditional donations provide a mechanism for channeling funds from donors to those affected in a verifiable and quantifiable way. It is a different paradigm from traditional donations which have not typically been as data-driven and therefore have failed to provide the intended impact or reach the intended beneficiaries. Diva protocol is an application that allows for the implementation of conditional donations under a web3 paradigm.
Why web3?
Implementing conditional donations on web3 allows for a more effective execution of the entire donation process. Smart contracts allow for code to be written that drives the conditional donation application in a way that is transparent and tamper-proof. This is because smart contracts allow a decentralized application to be deployed that is outside the manipulation of any party as it runs on a public blockchain. Data in such applications cannot be changed in a fraudulent manner which makes them well suited for financial purposes. This means, in the case of conditional donations, that the funds donated have full transparency and accountability in their use. This creates a continued interest in the donors to donate more funds and reach more people. It also guarantees the impact such donations have as the funds are channeled exactly where they ought to go. Such mechanisms enable the avoidance of challenges such as mismanagement. Perhaps the biggest benefit from using web3 based solutions for implementing conditional donations is the automation. Web3 based solutions powered by smart contracts can automate the entire process of making donations, which saves a lot of time and money. This is because such solutions can be set up to automate most of the steps which would traditionally have been done manually. From risk assessments to payout processing, web3 solutions can drive the entire conditional-donation pipeline. Core to this is an ecological data oracle.
What is an oracle?
An oracle is the part of a web3 tech stack that allows smart contract based applications to connect to the real-world. It allows applications that run on blockchains to get information from outside the blockchain. This might include anything from financial data that references the changes happening on the stock market, foreign exchange or crypto prices. It can also include data about the physical world such as the weather at a particular place and time or the amount of vegetation over a specific period. An ecological data oracle allows smart contracts to tap into the wealth of satellite data available to keep track of any changes occurring on the planet. Shamba’s data oracle provides a window into ecological events anywhere on the Earth from weather events to changes in vegetation to disasters such as wildfires and many others. Web3 apps can connect to the Shamba oracle to get the data they need to activate their event-driven logic.
A scalable resilience framework
Event-driven logic such as conditional donations to pastoralists triggered by drought events and lack of fodder for livestock, can be driven by data from an ecological oracle. With this final piece in place, the pipeline for channeling donations to impacted communities can be fully automated. Under this new partnership, Fortune Connect will pilot in Kenya a new financial product based on conditional donations powered by DIVA Protocol and the Shamba oracle. This pilot will demonstrate the potential for such solutions to provide sustainable social safety nets to the most climate-vulnerable populations. This comes at a time when the horn of Africa has suffered from both a devastating drought in some countries while others have been inundated by floods. Conditional donations can help communities in the global south become more climate resilient and be able to recover from potentially calamitous events. The roll-out of such solutions creates a scalable framework for channeling loss and damage climate financing to the global south in a way that is above board.
Commenting on the new partnership, Kennedy Ng’ang’a, CEO of Shamba, had this to say. “Enhancing the efficiency of donations has the potential of impacting millions of people in the world who are affected by climate disasters and need aid. Conditional donations will provide more transparency to the process and help provide many with an economic life line after a disaster. We are happy to be partnering with DIVA Technologies AG and Fortune Connect to enable this.”
Wladimir Weinbender, CEO of DIVA Technologies AG: “We are particularly excited to demonstrate to the world how blockchain-based smart contract technology like DIVA Protocol can enable use cases with a real positive impact on society. Especially in the context of donations, the blockchain technology offers a more transparent, trust-minimized, and efficient solution compared to existing solutions, which may result in an increased willingness to donate. We are glad to be partnering up with Shamba Network and Fortune Connect to enable this novel donation use case.”
DIVA Technologies AG published an in-depth blog on this partnership.
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About DIVA Technologies AG
DIVA Technologies AG is a Swiss based software consulting firm that consults traditional businesses as well as DAOs in Web3 related topics. The CEO is the co-founder of DIVA Protocol, a smart contract that acts as an operating system for a wide range of derivative applications including insurance, predictions, structured products, credit default swaps, and conditional donations.
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About Fortune Connect
Fortune Connect is a digital financial inclusion hub enabling farmers to access market information, technical knowledge, financial literacy, and financial access tools for credit and insurance in Kenya. Fortune Connect Innovation was started in 2021 and incubated by Fortune Connect before rolling out to several places in rural Kenya.
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About Shamba Network
Shamba Network powers an oracle that enables the collection, analytics and use of ecological data on-chain. It provides the web3 ecosystem with infrastructure that allows insight into the physical world, enabling things like ecological impact to be monitored. Through the Shamba oracle, smart contracts can get updated on what is happening on the ground and use this data to trigger a wide variety of actions.
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